00:10:59 · Scott Kupor
[00:10:59] S2: What's happening? Yeah. In our original office... And actually in our new office too, Marc and Ben had these very spacious offices, which was very nice. And Marc literally had, like, a bar. Like, Marc had one of the most amazing, like, bourbon and whiskey collections that I've ever seen. He probably still has it, although he's been generous with my birthdays over time. He sends things to me now since he's less of a drinker. I pick up most of his stuff. But, yeah, we would sit around and, like, talk, and it wasn't like there was no... Was like the one part of the day where there was no formal agenda. And sometimes we just bullshitted about whatever was going on. Sometimes we're actually talking about an investment or something in the company. But it was fun. It was like... It was a time period where you felt like... I mean, number one, for someone like me, even though I'd been around Ben and Marc already for almost ten years, they're just like the kinds of people where if you have time to sit down with them and just shoot the shit, like, outside of work hours, like, you always learn something. And so that was always fun. And it just felt like we just had this sense of camaraderie that we were trying to build something. So there was no agenda. We would sit around, and sometimes it would go for fifteen minutes, we'd all disappear. And sometimes we'd sit there for an hour. It never, like, turned, like, raucous. Like, you know, we all had, like, you know, families and kids to go home to. So it wasn't like we were, like, going from there to, like, a bar somewhere else, but it was just kind of a relaxing way to, end the day and have some fun and or intellectual conversation about stuff we were doing.
00:12:14 · David Senra, Scott Kupor
[00:12:14] S1: What do you think those versions of you three back then would think about the outcome that played out over the next sixteen, seventeen years? [00:12:21] S2: When I did the math for myself, and I was trying to convince my wife why in the middle of the global financial crisis we should pick our family up from North Carolina, go back to the Bay Area and do this thing, my math was like, Okay, I'm pretty confident they'll raise the first fund. No idea, quite frankly, what happens after that, but my general cactus was like, case, these funds take a long time, you know, we'll kind of weather through the financial crisis, and, you know, these guys had always been very good to me in terms of taking care of me, and I was like, look, you know, I'll find a job. I'll find another job, basically, if, like, this thing just doesn't pan out. That was kind of my general general back of the uncle of calculus. I never imagined we'd get to where we were, and nor did I... Actually, nor did I imagine we would get there as fast as we did. And I think that was the big thing. So Marc's talked about this, but in literally, like, first couple months after we closed the first fund, we invested in Skype. And, yeah, if you remember, Skype was part of eBay, right? Skype was bought by eBay, and it was, like, completely neglected inside of eBay, and yet amazingly, had this incredible network effect. If you look at the numbers, like, numbers of subscribers just kept growing and growing. So we joined with Silver Lake at the time. I don't know if you know Egon Durban who runs Silver Lake.
00:12:21 · Scott Kupor, David Senra
[00:12:21] S2: When I did the math for myself, and I was trying to convince my wife why in the middle of the global financial crisis we should pick our family up from North Carolina, go back to the Bay Area and do this thing, my math was like, Okay, I'm pretty confident they'll raise the first fund. No idea, quite frankly, what happens after that, but my general cactus was like, case, these funds take a long time, you know, we'll kind of weather through the financial crisis, and, you know, these guys had always been very good to me in terms of taking care of me, and I was like, look, you know, I'll find a job. I'll find another job, basically, if, like, this thing just doesn't pan out. That was kind of my general general back of the uncle of calculus. I never imagined we'd get to where we were, and nor did I... Actually, nor did I imagine we would get there as fast as we did. And I think that was the big thing. So Marc's talked about this, but in literally, like, first couple months after we closed the first fund, we invested in Skype. And, yeah, if you remember, Skype was part of eBay, right? Skype was bought by eBay, and it was, like, completely neglected inside of eBay, and yet amazingly, had this incredible network effect. If you look at the numbers, like, numbers of subscribers just kept growing and growing. So we joined with Silver Lake at the time. I don't know if you know Egon Durban who runs Silver Lake. [00:13:26] S1: Michael Dell, I just saw him a few [00:13:27] S2: day Yeah.
00:13:27 · Scott Kupor, David Senra
[00:13:27] S2: day Yeah. [00:13:27] S1: A few nights ago. He speaks very highly of them. Yeah. She brought him up the other night.
00:13:30 · Scott Kupor
[00:13:30] S2: Exactly. Yeah. And and and Michael Dell was, was part of that too, but it's literally like we did essentially a buyout. Like, it was like a crazy thing to do. We'd... We had just gone on the road and told all of our investors we're doing early stage venture investing. And we hinted, by the way, this this Skype thing was going. So, like, we pretty much said it was gonna happen, but we couldn't say it was gonna happen because, you know, it hadn't been done yet. But... So it wasn't actually a surprise for LPs, but it was clearly very different than the strategy we had laid out. And so we did this thing, and immediately, of course, everybody attacks us and says, these guys are crazy. What the hell are they doing? Doing a buyout. It'll never work. And there was all kinds of stuff at the time. If you go back and read the stuff, you'll see it. There was this big IP dispute with the original founders like Janus and Niklas and eBay about who actually owned the fundamental underlying IP. So a bunch of people looked at buying Skype, but nobody could get comfortable because they're like, gee, if we buy it, what if Janus and Niklas come out of the woodwork and say they own it, so do you really own the IP? You know, Janus's genius, was, let's actually figure out a way to work with these guys. So we actually... You know, our bids came together, and we actually worked collaboratively with with these guys as a way to moderate this IP question. But anyways, everyone's like, look, this is crazy. But the beauty of it, literally eighteen months later, we sold to Microsoft for four times what we paid, like eighteen months before. And so, the news cycles were just unbelievable. And look, part of this business is momentum against momentum, right? Which is true of so many businesses. And so, we were able to actually raise our second fund well ahead of what we had planned doing, in part because the Skype thing just worked out so well, and it just completely changed the narrative. We also had a company called Nasira, which was in the networking space, Martin Casado, if you know Martin, is one of the partners there today. His company got sold to Cisco early on in first fund. We had these very quick early wins, which basically potentially could have gone the other way, but they didn't. They went in our favor, and they basically just dramatically accelerated the progress.
00:15:19 · Scott Kupor, David Senra
And key to our business model, right, to do the Michael Ovitz business model, we had to have enough of a fee stream to be able to hire all these other non investing people, right? Yeah. And, you know, Marc talked about this before, but, you know, what Marc and Ben did, they were very magnanimous. The two of them didn't take... They took no salary, right, at the beginning of the company because they wanted to basically take, you know, as much of the fees as they could to give it to me to go hire other people, you know, to build this thing out. But, you know, we needed another... You know, in order to kinda continue that build out, the second fund gave us, you know, a, you know, stacking fee stream that allows us then to say, okay, now we can actually double down on the strategy. So it was one of these things where, like, we had early success. It was also 2009. Right? So, again, middle of the global financial crisis, you you know this, but, like, you know, Sequoia guys put out this, you know, RIP presentation. Have you seen this? [00:16:07] S1: RIP good good times?